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Thursday, Dec. 11, 2008 RSSSEND TO A FRIENDPRINT
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At a Glance...
Top Stories
House Passes Rescue Plan for Big 3
Bailout Considered Just a Beginning for Revival of U.S. Auto Industry
Tough Sell for Colorado Car Dealers
Pressing Its Investors, GMAC Says It Lacks the Capital to Be a Bank
White House: Bush May Clear 'Car Czar' Pick with Obama
Big 3 Crisis Squeezes Suppliers
Opinion: Senate Should Give Auto Industry a Shot at Recovery
NADA Update
NADA Offers Virtual Seminar to Help Dealers in 'Tough Times'
NADA to Members: Verify Contact Information to Stay Informed
STAR Answers Dealers' Questions About Hardware Based Systems
Lenovo Offers Holiday Savings
Top Stories
House Passes Rescue Plan for Big 3

Auto Makers Poised to Get $14 Billion in Loans, but Bill Will Be Tough Sell in Senate
WASHINGTON -- The House of Representatives approved a wide-ranging rescue Wednesday of the nation's auto makers, sending the plan to the Senate where Republican critics could endanger the initiative. The White House and top Democrats on Capitol Hill hoped to hasten passage of the package this week and clear the way for release of billions in federal aid in an effort to avert a collapse of one or more of the troubled Big Three. But the compromise bill, forged over five days of negotiations among top presidential aides and the Democratic congressional leadership, is proving a difficult sell among Republicans, despite high-level arm twisting. Their backing wasn't so important in the House, where the package passed on a 237 to 170 vote, with Democrats providing most of the support. But Republican backing will be crucial in the narrowly divided Senate to give the measure the 60 votes needed to ensure passage. Sen. Bob Corker (R., Tenn.) said the White House may have hurt its cause Wednesday. "They probably left with less support than they came in with," he said. Sen. Corker suggested that the more rank-and-file Republicans learn about the White House-backed compromise, the less they like it. Amid the uncertainty, House Democratic leaders were determined to press forward. "If we do nothing we face the risk that sometime soon there will be no American auto industry," said House Majority Leader Steny Hoyer (D., Md.).
Source:  The Wall Street Journal (Subscription required.)

[Editor's Note: URGENT DEALER ATTENTION -- Serious roadblocks for the bridge loans still exist in the Senate. With a vote expected as early as today, NADA is strongly urging all dealers and their employees to contact their Senators—especially Republican Senators—and ask them to support an automotive stabilization package. Senators need to be told that bankruptcy is not an option as it would further decimate both manufacturers and dealers. Any information from the Senate offices should be relayed back to NADA's Legislative Affairs Office at (800) 563-1556. Senators can be reached through the Capitol Switchboard at (202) 224-3121.]

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Bailout Considered Just a Beginning for Revival of U.S. Auto Industry

Transforming the U.S. auto industry into a profitable, innovative sector is likely to take more than the emergency loans approved by the House last night. Business leaders and industry analysts said the companies will also need further government assistance to get customers back in showrooms and stimulate demand for energy-efficient vehicles. Chief among them are proposals aimed at getting consumers to open their wallets again. The recession has scared off shoppers, knocking down sales in November to levels not seen since 1982. And many of those who want to buy are finding it difficult to obtain financing. To help address those problems, the National Automobile Dealers Association has suggested the government allow new-car buyers to deduct auto loan interest and sales tax on their personal income taxes. Others say a federal stimulus package could help get credit flowing and improve American households' purchasing power, providing an indirect benefit to automakers. "This business doesn't run without credit," [said Dan McGinn, chief executive of TMG Strategies and an adviser to General Motors.] "Automakers are not going to make money again until people start buying cars," said Aaron Bragman, an auto analyst with Global Insight.
Source:  The Washington Post

[Editor's Note: Bills that provide consumer tax incentives designed to boost auto sales, S. 3684 and H.R. 7273, have been introduced in Congress. NADA's Legislative Office is urging dealers to call their members of Congress today and ask them to pass this legislation. A spike in auto sales would help stabilize the industry now. The measure would temporarily permit new car buyers (for loans made until Dec. 31, 2009) to deduct the interest on their car loans as well as state sales taxes from their personal income taxes. The car loan deduction would be available for the life of the loan.]

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Tough Sell for Colorado Car Dealers

Colorado car dealers John Medved and John Schenden have struggled to close the deal this year because of a credit crisis and a souring economy. Selling a $14 billion loan plan to rescue the Detroit automakers has been equally challenging. "It's frustrating," Medved said by cell phone Wednesday as he waited to board a plane in Washington prior to the House vote. "I think some people understand what the ramifications are, but others are standing on principle and not taking into consideration what those ramifications are. We're talking about a lot of carnage and suffering." Medved, who was on his way back to Denver, said he worries about millions of lost jobs across the country should the major automakers go belly up. A number of businesses in Colorado, such as Bestop, a maker of tops for Jeeps, and Gates Corp., a supplier of belts and hoses, would feel the impact, he said. That's not to mention the dealerships, which are significant employers and civic boosters. "The communities count on us for more than sales and service," Medved said, adding that his business supports an array of causes, from the Salvation Army to his parish in Golden, St. Joseph Catholic Church. Medved, Schenden and a couple other Colorado representatives met with lawmakers in Washington this week to back the rescue effort. They had dinner on Tuesday with Rep. Doug Lamborn, a Colorado Springs Republican - who voted against the loan plan - and talked with Sen. Ken Salazar and outgoing Sen. Wayne Allard on Wednesday.
Source:  Rocky Mountain News

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Pressing Its Investors, GMAC Says It Lacks the Capital to Be a Bank

As lawmakers debated a bailout package for Detroit’s big automobile companies, the future of an important piece of the industry was being negotiated on a parallel track in New York on Wednesday. Cerberus Capital Management, the private investment firm that controls GMAC and owns Chrysler, raised the specter of bankruptcy to apply pressure to GMAC’s bondholders to go along with a bond-exchange plan that many of them have been resisting. Whether bondholders agree will not be known for at least a few days. But whatever happens at GMAC will ripple through the auto industry. The financing company provides loans to consumers for cars and to dealers for their inventories. General Motors, which retains a large stake in the financing company, said in its latest turnaround plan to Congress that it was counting on GMAC’s viability. Otherwise, G.M.’s financial problems, and its need for government assistance, could grow. Without that money, GMAC could indeed be forced to file for bankruptcy by year-end, industry experts said. For G.M., any additional problems at the financing company would bring more pain for its dealers, who have long depended on GMAC to provide consumer financing and to carry its inventory. The automaker set up the unit in 1919 to help customers buy its cars. “How serious is this on a scale of one to 10?” asked Michael Martin, chairman of the G.M. Industry Relations Committee at the National Automobile Dealers Association. “It’s a 10.”
Source:  The New York Times

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White House: Bush May Clear 'Car Czar' Pick with Obama

WASHINGTON -- The Bush administration hinted today it will seek a "car czar" who would be acceptable to President-elect Barack Obama and could stay on after Obama takes office next month. "We expect to work closely with the president-elect's team in figuring out, once this legislation is passed, what the most effective means possible is of implementing this legislation," said Joel Kaplan, deputy White House chief of staff. One condition of the legislation is the appointment of a government official who would oversee restructuring of the Detroit 3. Kaplan told reporters that the president's designee, as the bill labels the industry overseer, will make his or her most critical decisions after Obama's Jan. 20 inauguration. The designee would not have absolute discretion to declare whether a plan would make a company viable. Instead, Kaplan said, the designee must certify that a plan meets a tough accounting standard called positive net present value. The standard takes into account all of a company's expected cash receipts and outflows, including long-term obligations for pensions and benefits. "This is going to be one of the most highly reviewed and scrutinized certifications in history," Kaplan said.
Source:  Automotive News (Subscription required.)

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Big 3 Crisis Squeezes Suppliers

Auto parts makers in trouble as production slows, lending tap shuts
The auto parts industry -- already riddled with bankruptcies -- is in a state of quiet panic over the ability of Detroit's three automakers to secure federal loans and avoid financial collapse in coming weeks. General Motors Corp. and Chrysler LLC have been frank about their need for government aid to pay their bills -- many of them for parts and materials -- come Jan. 1. The financial crisis and credit squeeze that has turned off the borrowing tap for Detroit automakers is equally unavailable to parts makers, which have become even more cash strapped as production slows because of the severe downturn in new car and truck sales. "Suppliers are extremely concerned right now," said Neil De Koker, chief executive officer of the Original Equipment Suppliers Association, a leading trade group for the auto parts industry. "They are trying to avoid panic."
Source:  The Detroit News

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Opinion: Senate Should Give Auto Industry a Shot at Recovery
The Detroit News

Approval of an auto industry loan package will not save the domestic automakers, but it will give the Detroit Three a chance to save themselves. The emergency loans are desperately needed to keep the automakers alive long enough for their turnaround plans to take hold. Without the assistance, one or more of these companies could die. No one can know the impact a failure of a major automaker will have on the national economy. But at the least it would deepen and darken an already frightening recession. The House understood that, as evidenced by its approval vote Wednesday night. But the Senate is a tougher sell. Republican senators primarily from states that host foreign auto manufacturers have shown little sympathy for Detroit's plight, and have assumed they know more about building cars than Chrysler, Ford and General Motors. The automakers are moving with purpose to fix what ails them. If successful, they will change the fate of the workers and businesses that depend on them throughout the economy and across the nation... But if the Senate lets them die, they will take with them 4.5 million jobs and all hope for a quick economic recovery. We urge the Senate, please give Detroit a chance to make things right.
Source:  The Detroit News

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NADA Update
NADA Offers Virtual Seminar to Help Dealers in 'Tough Times'

In response to the challenges facing dealers during these uncertain times, NADA is offering a presentation featuring two speakers who can explain the options and detail the steps dealers need to take to protect their businesses. Tough Times, Tougher Dealers: Saving Your Dealership’s Assets will be offered as a virtual seminar in December and January and as a workshop at the 2009 NADA Convention & Exposition in New Orleans. Tough Times, Tougher Dealers, presented by Michael Charapp, Esq., of Charapp & Weiss, LLP and Bradley Nicklin, CPA, of Beers + Cutler, discusses the tough issues facing almost every dealer today. It is intended to help dealers and managers understand the steps required to protect their dealerships’ assets during these tough economic times.

In this presentation, participants will learn valuable information on cash management, expense control, and franchise rights issues. They will also learn how to deal with bankruptcy—both at the manufacturer and dealership level—as well as franchise terminations, brand terminations, and the legal ramifications of reducing a workforce. Additionally, the speakers will present other practical considerations for surviving this tough environment, both legally and financially.

The virtual seminar will be offered twice—on Dec. 18 from 1–3 p.m. EST and Jan. 13 from 1–3 p.m. EST. The registration fee is only $50 per computer connection. For more information or to register, visit www.nada.org/seminars. The convention workshop will also be offered twice—on Saturday, Jan. 24 at 11 a.m. CST and Monday, Jan. 26 at 8:30 a.m. CST.

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NADA to Members: Verify Contact Information to Stay Informed

NADA's Membership Department is urging all association members to verify their contact information through a new online process available at www.nada.org/membership. Members who maintain a current email and mailing address ensure that they will continue to receive important and timely updates from NADA. The new online verification process also allows members to easily change their contact information. Members may also visit www.nada.org/subscribe to manage their subscriptions to NADA's member newsletters, including the daily e-newsletter NADA Headlines.

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STAR Answers Dealers' Questions About Hardware Based Systems

Standards for Technology in Automotive Retail (STAR) has developed new guidelines to help dealers evaluate their Dealership Security. Visit STAR's Dealer Infrastructure Guidelines (DIG) publication. To learn "What is recommended for general maintenance of hardware based systems?" click here.

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Lenovo Offers Holiday Savings

Lenovo is offering NADA members savings of up to 35 percent on all ThinkPad notebooks and accessories. Lenovo's ThinkPad SL notebook -- built for small businesses with legendary ThinkPad reliability, plus advanced wireless and multimedia features -- is available at a discount with eCoupon USXHOLIDAY. This offer ends Dec. 31. To take advantage of these savings, visit NADA's Online PC Purchase program (log-in required), click www.lenovo.com/shop/deals/nada, then "Special Offers," or call (800) 426-7235, Option 1, Ext. 4838. Free ground shipping is available on all Web orders.

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Featured Video
 
 
NADA Chairman Annette Sykora at a press conference with U.S. Sen. Barbara Mikulski. Click here for the NADA-TV report.


More Video Highlights

Quotable
 
"If we do nothing we face the risk that sometime soon there will be no American auto industry."

   
-- House Majority Leader Steny Hoyer (D., Md.), referring to the plight of the Detroit Three automakers if Congress fails to pass emergency bridge loans, The Washington Post, Dec. 11


"The communities count on us for more than sales and service."

    -- Colorado car dealer John Medved says auto dealers around the country delivered this message to members of Congress this week, Rocky Mountain News, Dec. 11


"How serious is this on a scale of one to 10? It's a 10." 

    -- Michael Martin, chairman of the GM Industry Relations Committee at NADA, referring to the possibility that GMAC could be forced to file for bankruptcy by year-end, The New York Times, Dec. 11


"This is going to be one of the most highly reviewed and scrutinized certifications in history." 

    -- Joel Kaplan, deputy White House chief of staff, referring to the appointment of a "car czar" who would oversee restructuring of the Detroit 3, Automotive News, Dec. 11


"The automakers are moving with purpose to fix what ails them. If successful, they will change the fate of the workers and businesses that depend on them throughout the economy and across the nation ..."

   
-- The Detroit News (Opinion), Dec. 11
NADA Convention 2009
 
  
Convention Workshops Keyed to Today’s Economy

Now more than ever, dealers need to meet, talk and learn how to survive in tough times. In that spirit, workshops planned for NADA’s upcoming convention in New Orleans will focus on recession-proof business operations. NADA Headlines will spotlight three convention workshops each week.

(1) Tough Times, Tougher Dealers: Saving Your Dealership’s Assets

(2) Technology-Enabled Sales and Marketing: Putting People Skills Back into the E-process

(3) The Five Essentials to Create and Maintain Accountability in Your Dealership

Tough Times speakers Michael Charapp, Esq., of Charapp & Weiss, LLP and Bradley Nicklin, CPA, of Beers + Cutler, will discuss the tough issues facing almost every dealer today and teach dealers and managers how to protect their dealerships’ assets during these tough economic times. Participants will learn how to deal with bankruptcy—both at the manufacturer and dealership level—as well as franchise terminations, brand terminations, and the legal ramifications of reducing a workforce.

Technology speaker Jim Ziegler of Ziegler SuperSystems, Inc. will show attendees how to use new online social networks and online technology to generate sales. Participants will learn how to incorporate video blogging and video walk-arounds into their online marketplaces, and will learn how to build stronger personal relationships with customers over the phone and Internet.

Accountability speaker Michael Rees of DealerPro Sales Solutions will teach dealers and managers how to hold their teams accountable for attracting and retaining customers. Participants will learn how to keep their employees on task and learn how to approach those who don’t.

Join us in New Orleans at the 2009 NADA Convention and Exposition Jan. 24–27. Click here to register.

Video Highlights
 

'NBC Nightly News with Brian Williams' reports: "Demise of a local car dealership leaves a big dent."




 
Registration for the NADA convention in New Orleans Jan. 24-27 is open. Click here to see just how much progress New Orleans has made since Katrina.


NADA's New Orleans Project: Lusher Charter School
NADA's Return to New Orleans


Click here for more NADA-TV reports.

 
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NADA For more information on NADA, visit www.nada.org or contact NADA, 8400 Westpark Drive, McLean, VA 22102. This email may contain an advertisement of NADA products and services. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. If you are a franchised new-car or -truck dealer and would like to become a member of NADA, please visit the Join NADA section of www.nada.org. Questions or comments concerning NADA Headlines content may be directed to media@nada.org.